Premium drops £200m in 2012
The total amount of UK motor insurance premium fell £200m in 2012 to £13.1bn, according to Deloitte.
The Deloitte research showed that total motor premiums in 2011 were £13.3bn. Personal lines motor makes up 80% of the total.
Figures presented at Deloitte’s motor insurance seminar showed that the motor insurance market’s combined operating ratio improved last year by 1%, to 105%.
Deloitte predicted that motor insurance premiums are likely to fall further in the next 12 months, as competition increases.
Deloitte insurance partner James Rakow said: “Motor insurers are on average paying £105 of claims and underwriting expenses for every £100 of premium and 2012 may well mark the top of the underwriting cycle.
“Based on a Deloitte survey, motor insurance premiums are likely to fall for the remainder of 2013. Our survey indicates that the market at present is evenly split on whether premiums will rise or fall this year, but the momentum is currently favouring reductions, which consumers will welcome. In the past, once the market starts lowering premiums, it has been difficult to reverse the trend.”
Rakow said that insurers needed to make their profits from core underwriting or by selling extra policies such as breakdown cover and legal expenses.
Deloitte based its findings on insurer data supplied in FSA returns, representing around 80% of the 2012 UK motor market premium.
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